The JPY is clearly trending down as it makes lower highs and and lower lows (known as a Step Pattern). However, strong Resistance sits at 86.34, exactly where the JPY closed on Friday. The two long wicked candles (see blue arrows) represent USD seller’s inability to force the Dollar below 86. Therefore, given the tremendous amount of volatility on this pair, a solid close below Resistance would most likely signal significant fresh JPY lows ahead. Though, a bounce off Resistance will indicate a bottom has been reached and in which case it may be hard for JPY bulls to stand their ground between 86 and 89.50
The EUR, after breaking above significant Resistance in the 100 day moving average, quickly met firmer Resistance at the 1.30 handle. The EUR looked to break through 1.30 but failed for nearly 2 weeks. Last Thursday’s price action finally saw that break, however, the move was partially retraced on the ensuing day. If the EUR can sustain its close above 1.30 then analysts next target 1.34 followed by the 200 day MA at 1.36. If, however, the EUR can not sustain levels above 1.30 the EUR may be vulnerable and fall back towards the 50 day MA.
The CAD finally reclaimed the 100 day moving average from the Greenback after trading above that level for more than 1 month. This breach is particularly significant because CAD lows and closes have tested the 100 MA 10 times since the last breach and failed to over take it each of those times. Furthermore, during this period of volatility the CAD has had only 1 stretch in (5 attempts) of consecutive winning days that were not followed by at least a third consecutive win. The next level CAD bulls will target is a close below 1.0150. However, if the CAD settles back above the 100 MA it will most like weaken and look to retest the 50 MA.
Written by bforex.com